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Why home insurance costs have risen
The insurance industry is experiencing challenging market conditions, which has had a knock-on effect for reinsurance costs for new and renewed policies alike. Let's look at some of the major reasons for the increase:
Rebuilding costs and inflation
Material and labour shortages and inflation are putting ongoing strain on the building industry. This includes the cost of skilled tradespeople and the fact that raw materials are dearer and harder to find – making the costs to rebuild more expensive.
Contents repair and replacement
It is increasingly costing more to replace and repair contents items, which has contributed to rising claim costs. This takes into account supply issues, shipping delays and the global shortage of computer chips and other components of many white goods and appliances that make them cost more to replace.
Extreme weather events
Weather events like bushfires, floods and storms are happening more frequently and severely. This increases the level of insurance risk alongside rising costs associated with managing claims, like the cost of skilled trades and raw materials needed to repair and rebuild.
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Are your policy or payment details out of date? You can log in to your online account to check what you're covered for or call us to update your policy details.
Take control of your policy
Whether you're buying a new policy or renewing your existing one, here's how to help make sure your cover suits your lifestyle and budget.
Exclusive benefits and discounts for RACV Members
Frequently asked questions
There are three types of excess:
Basic excess
This is how much you pay when making a claim, including claims for fusion cover and portable items (if you’ve added them to your policy).
Your basic excess can be $100, $200, $300, $500, $750, $1,000, $2,000, $3,000, $4,000 or $5,000. If you’re aged 50 or older, you can choose a $0 basic excess. Remember, choosing a higher basic excess can reduce your premium.
You can change your basic excess at your policy renewal time through your online account.
Accidental damage excess
If you choose to add accidental damage cover and make a claim, you’ll pay a $300 excess instead of your basic excess.
Special excess
If a special excess applies to your policy, you’ll need to pay this as well as your basic excess.
The amount you insure your home and contents for (we call that the 'sum insured') should be enough to rebuild your home or replace your contents if you had to do it today.
Remember, when we talk about your home, we don't just mean the building itself. If you have things like fences, sheds, in-ground pools, or covered car spaces, they count too.
There are a few things to think about:
- If you underinsure your home and contents, you may be caught short if you have to totally rebuild and replace them.
- If you insure your home and contents for more than it costs to rebuild and replace them, you'll only be able to claim the actual cost to do so.
- Your building sum insured will be different to the market value of your home, which you might find on a property valuation, because it doesn't include the land value.
- Make sure you include the cost of demolition and debris removal, building and planning professionals, plus any statutory or regulatory requirements.
You can use our buildings calculator and contents calculator as a guide.^
Sometimes things happen that are beyond our control which can make it difficult for us to keep up to date with paying bills. If you need financial hardship support with any of your RACV products or services, we're here to help in any way we can.
We're happy to talk about your options if you call us on 13 15 60, or you can find out more about the financial hardship support we offer.
# RACV Years of Membership: at 5 years Bronze cardholders receive a 5% discount, at 10 years Silver cardholders receive a 10% discount, at 25 years Gold cardholders receive a 15% discount and at 51 years Gold 50 cardholders receive a 20% discount.
* The Multi-Policy Discount and Years of Membership Benefits exclude Travel, Business and Farm Insurance products. To qualify for the Multi-Policy Discount, you must hold two eligible RACV Insurance policies. For further details, see the Premium, Excess and Discounts guide at racv.com.au. Discounts will only be applied until any applicable minimum premium is reached. On renewal, any increases or decreases in your premium may be limited by factors such as your previous year’s premium. You may not save more with more eligible policies and by staying with RACV Insurance longer if a minimum premium is reached, or limits have been applied to increases or decreases in your premium.
^ The RACV Home Buildings Calculator provides an indication of rebuilding costs only and in no way guarantees the amount RACV Insurance may agree to insure your home for. It is your responsibility to check that this amount is enough to cover the rebuilding costs of your home at today’s prices. Before you decide whether to buy or continue to hold RACV Home Insurance, you should calculate the actual replacement value of your home and consider the information in the Product Disclosure Statement.
The information provided is general advice only. Before making any decisions please consider your own circumstances and the Product Disclosure Statement and Target Market Determinations. For copies, visit racv.com.au. As distributor, RACV Insurance Services Pty Ltd AFS Licence No. 230039 receives commission for each policy sold or renewed. Product(s) issued by Insurance Manufacturers of Australia Pty Ltd ABN 93 004 208 084 AFS Licence No. 227678.